What insurance do employers of domestic helpers need to buy?
So you’ve decided to employ a domestic helper.
After interviewing numerous candidates, you have decided to offer a contract to a helper that you feel is a good fit for your family. The only thing left to do is to have your new helper sign her contract and sort out her visa status with the immigration department, right?
Well, not really.
You see, in Hong Kong it is a law that all employers obtain Employee Compensation Insurance coverage for any staff they are employing, no matter whether the staff work part-time, full time, or even if they are considered domestic employees. As long as you’re paying a salary to someone you need to purchase Employee Compensation Insurance coverage.
What is Employee Compensation Coverage?
Employees Compensation (EC) Insurance is a type of insurance product which, according to Hong Kong law, all employers must obtain to protect against their liability towards employees injuring themselves, or developing an occupational disease, during the course of their normal job.
In many cases, should an employee need to claim under the EC policy, the coverage will provide weekly payments to the member of staff which can be used to offset their loss of earnings, both present and future, or pay for necessary medical expenses.
It does not matter what role the employee is filling, whether they are working full time or part time, nor does it matter whether they are employed in a domestic capacity or in an office. Under The Employees Compensation Ordinance (Cap. 282) any person receiving money to perform a job must be covered by an EC insurance policy.
As such, domestic helpers must be protected by an Employees Compensation Insurance policy which has been purchased by their employers.
What is helper insurance?
Helper insurance, or maid insurance, at its most basic form is pure Employees Compensation coverage; the most basic helper insurance plans will ensure that your domestic helper will receive compensation in the event that he or she is injured during the course of their work.
Essentially, in the event that the helper fell over and sprained their ankle trying to get items out of a cupboard, or if they suffered burns from oil whilst cooking, the Employee Compensation insurance plan which you have purchased will ensure that they receive financial assistance after the accident in question.
However, helper Insurance can be more than simple Employee Compensation coverage. In many cases a helper or maid Insurance policy will actually enable you to expand the coverage under the plan to include a range of extended coverage benefits, including:
- Health Insurance
- Personal Accident Insurance
- Repatriation Expenses
- Dental Insurance
- Fidelity Insurance Protection
- Loan Protection Insurance
- Loss of Services Allowance
Basic helper insurance plans versus more comprehensive helper insurance
So why do many people choose to obtain the most basic, Employee Compensation Only cover for their domestic helpers? Well, the simple answer is that in many cases basic plans which only offer Employee Compensation coverage will be far less expensive than a more comprehensive plan providing a range of extended benefits.
Choosing to purchase a pure Employee-Compensation insurance policy for the domestic helper can leave an employer exposed to a large amount of risk, especially when considering that employers of domestic helpers are required to provide the helper with free medical treatment under the terms of a standard employment contract.
This is legislated under Hong Kong law, and means that in the event of your domestic helper requiring medical care you will have to pay for the treatment expenses. Depending on the severity of the illness, or condition, those expenses could be very high; especially if the employer has to cover the costs out-of-pocket.
There are a large number of options for helper insurance coverage in Hong Kong, with many different insurance companies offering plans of this type. However, it’s important to understand that the helper or maid insurance plans on offer will vary, so it will be important to shop around and find the best plan for your needs.
If you’re happy obtaining only the bare-minimum EC Insurance coverage then you needn’t worry about purchasing a more extensive policy – you will have fulfilled your obligation under the law. However, for many households their domestic helpers will have been with them for years, and possibly decades, actually becoming more a part of the family than an employee. In this situation, you may wish to purchase a plan which offers higher levels of protection for your helper, but the choice is completely left up to you.
Are there limitations on helper insurance?
The biggest limitation or obstacle on helper insurance plans is in finding coverage for older domestic helpers. Generally, most helper insurance policies will only accept new applications for domestic helpers under the age of 60. There are a few options that will provide a new enrolment for helpers over the age of 65, although these products are less prevalent throughout the marketplace.
However, if your maid is aged 64 or older then the insurance company may add an additional fee to the overall plan premium due to the heightened risk of illness associated with older individuals.
Also, you should be aware that the level of coverage available under most helper insurance plans in Hong Kong will generally be rather low; these plans are not designed to provide long term coverage in the event of a severe illness or accident. As such, if you’re concerned about the costs that you may have to bear in the event of your helper becoming seriously ill, then it may be worth considering the purchase of a standalone health insurance policy to protect your helper against the costs of their healthcare treatment.
Use an insurance broker to shop around for the best helper insurance
Whether you are looking for simple Employees Compensation protection, or are trying to purchase a more comprehensive policy for your helper, there are a range of options available to you.
From AXA, Generali and Chartis, to China Ping An and Liberty International, there are a number of well-respected local and international insurance companies offering decent helper insurance plans.
CCW Global is an independent insurance brokereage with experience in helping employers find the right insurance coverage for their domestic helpers, contact CCW for more information and we will help you find the right insurance policy.